Data Center Boom Heats Up

Cloud providers are racing to offer the best value and availability to customers, spurring over a million square feet of new data center development in the U.S.

The cloud computing phenomenon has spurred many companies to scale back their data center investments as they opt to run portions of their IT stacks on low-maintenance, subscription-based services. But that doesn't mean we're in a data center downturn--quite the opposite, actually.

With a raft of current projects adding more than a million square feet of data center space around the country, the United States is in the middle of a data center boom. Whether the operators are heavily trafficked websites, regional data center developers looking to keep up with demand or cloud services providers themselves, new and reconfigured data centers are popping up at a dizzying pace.

The latest development is Facebook's reported plans to build a $1.5 billion data center in Altoona, Iowa, joining the social media giant's huge facilities in Oregon and North Carolina. (You can get a look at Facebook's Oregon data center here.)

And it's not just the big names that are making huge data center investments. A mystery tenant recently agreed to lease all of a new 100,000-square-foot data center in Santa Clara, in the heart of Silicon Valley, and Comlink, a regional cloud services provider active in the upper Midwest, is building a new data center in Grand Rapids, Mich.

Throw in Stream Data Center's plans to build a ninth facility in Texas--and second in San Antonio--and it's clear we're in the midst of a heyday for data center development. Data center designers are also getting more creative, building futuristic data centers in underground bunkers or leveraging solar power. Check out this slideshow of nine creative data center designs.

So what's driving all of this activity? Dana Gardner, principal analyst at Interarbor Solutions, insists it's a confluence of trends. Cloud providers, Gardner says, are racing to offer the best value and dependability and, in some cases, to become the hosts for other cloud providers.

Furthermore, the costs of real estate and data center skills have been pushed downward by years of economic sluggishness, but they're poised to start rising again, introducing a sense of urgency. And with many of the companies in question experience rapid stock price growth, they have the balance sheets to make the necessary investments.

What's more, companies are feverishly trying to establish themselves as having the fastest, best-performing websites, applications and services to ensure they're not left behind.

"Those who are not at the elite level now will be hard-pressed to catch up later," says Gardner.

That said, what may be the most important factor of all is that software-defined data centers enable operators to change a data center's purpose and the type of workloads it's running very quickly, turning traditional economic models on their heads.

"The risks of massive data center investments are fewer, because the data center itself can be adaptive even as the facilities and hardware are constant, and the investments recovered over a long period of time," says Gardner. "The economics of data centers have never been better."

Our latest survey shows growing demand, fixed budgets, and good reason why resellers and vendors must fight to remain relevant. One thing's for sure: The data center is poised for a wild ride, and no one wants to be left behind.